This letter responds to your request for an administrative ruling with respect to
whether your client, [ ], is required to register with FinCEN as a Money Services
Business (“MSB”) pursuant to 31 C.F.R. § 103.41. Pursuant to 31 CFR § 103.82,
FinCEN declined to provide [ ] with such a ruling in light of an ongoing proceeding in
which [ ] was engaged with another department of the federal government relating to
the subject of the request. Upon notification of termination of that proceeding, FinCEN
responded to [ ]’s request by letter dated October 28, 2003, explaining that [ ] had not
provided sufficient information to enable FinCEN to make a definitive ruling as to
whether [ ] is an MSB. By letters dated December 9, 2003, and February 23, 2004, as
supplemented on June 15, 2004, you provided additional information about the services
offered by [ ]. Based on the representations contained in your letters, FinCEN has
determined that [ ] is not an MSB for BSA regulatory purposes to the extent it engages
in international courier operations that originate or terminate in the United States, or
armored truck transportation services to and from U.S. financial institutions for local U.S.
customers, described in your letters. However, to the extent that [ ] engages in transshipment
transactions through the United States as described below, FinCEN would deem
[ ] a money transmitter as defined at 31 CFR § 103.11(uu)(5).

Background

According to your representations, [ ] is located in Florida, and provides worldwide
transportation of currency, monetary instruments, and other valuables for financial
institution clients, such as domestic and foreign banks and currency exchange houses.
[ ] engages in the following activities:

International courier operations in which [ ] either transports
valuables from a U.S. financial institution to a foreign-located
business, or from a foreign-located business to a U.S. financial
institution. In some cases, [ ] is hired to transport funds for
exchange, and to return new, or differently-denominated, currency to
the original sender.1

Local armored truck transportation of valuables for U.S. customers
such as local governments and merchants, to and from the customers’ local banks. Each of these local armored truck deliveries either originates, or terminates, with U.S. banking institutions subject to BSA regulation.

Your original ruling request indicated that [ ] engaged in the trans-shipment of currency
between foreign-located banks or currency exchange houses, through a U.S. airport. In
the course of trans-shipment transactions, currency was flown into the U.S. for purposes
of making travel connections, and in some cases, [ ] took the currency out of the U.S.
airport’s international terminal to recount and repackage the currency. Your letter of
February 23, 2004 represents that [ ] is no longer engaged in this activity. You have
represented that, to the extent [ ] may conduct trans-shipments through the United
States in the future, [ ]’s couriers will remain in the international terminal until they can
transfer to connecting flights departing the United States.

Analysis

Money services businesses, a category of financial institution for purposes of
regulations implementing the Bank Secrecy Act (“BSA”), are defined at 31 CFR
103.11(uu) and include currency dealers and exchangers, check cashers, issuers, sellers,
and redeemers of traveler’s checks, money orders, or stored value, money transmitters,
and the United States Postal Service. Among the BSA provisions to which MSBs (other
than issuers of stored value, and agents of an MSB) are subject is the requirement to
register with FinCEN. Based on the representations contained in your letters, the MSB
categories into which [ ] could potentially fall include money transmission and currency
dealing/exchange.

For BSA regulatory purposes, the term “money transmitter” is defined at 31 CFR
103.11(uu)(5). Subparagraph (B) of the definition, “[a]ny other person engaged as a
business in the transfer of funds,” is broad enough to encompass various types of money
transmission including physical transportation of funds. Whether a person falls within
this subparagraph is a fact-based determination. As explained in my October 28, 2003
letter, FinCEN does not treat as a money transmitter an armored car business that solely
engages in providing secure transport services, including currency and other valuables,
for the Federal Reserve, the U.S. Mint, banks, and private companies, so long as the
armored car business cannot be viewed as participating, or having a stake, in a financial
transaction.2 Factors that FinCEN would consider in determining whether an armored car
business has participated, or had a stake, in a financial transaction include: whether the currency is transported for and/or to an entity that falls within the definition of financial
institution for purposes of BSA regulations (31 CFR 103.11(n)), the beneficiary of the
funds, and the nature and extent of the services provided by the armored car business.

In my October 28, 2003 letter, I explained that, to the extent that [ ] contracts
with a U.S. financial institution to transport currency, [ ] is not a money transmitter for
purposes of the BSA.3 To enable FinCEN to determine whether [ ] is a money
transmitter with respect to transportation of currency other than for a U.S. financial
institution, we requested additional information including whether [ ] transports
currency other than to a U.S. financial institution subject to BSA regulations, and whether
[ ] has knowledge that the beneficiary of the funds it transports is a person(s) other than
the person with which [ ] has contracted to transport the funds.

Your letter of December 9, 2003 states that, with respect to its international
courier operations that originate, or terminate, in the United States, [ ] will only
originate or terminate transactions at a U.S. financial institution. In regard to our
question whether [ ] ever transports currency to or for a third-party beneficiary, your
letter states that [ ]’s services are offered only to domestic and foreign banks and
currency exchange houses, and that [ ] does not knowingly transport any of the funds it
receives for deposit into the account(s) of any person or entity other than the entity that
provided the funds, or requested their transportation. According to your letter, [ ] does
not provide its courier services to third-party beneficiaries, including of financial
institutions. Rather, [ ]’s courier services are exclusively limited to the domestic and
foreign banks and currency exchange houses with which it contracts to transport
currency. Based on your representations that [ ] does not transport funds on behalf of
third-party beneficiaries, FinCEN would not deem [ ] a money transmitter by virtue of
its international courier operations originating, or terminating, at a U.S. financial
institution.

With respect to [ ]’s transportation of funds for non-financial institution U.S.
customers such as local governments and merchants, to and from the customers’ local
banks, your supplemental letter of June 15, 2004, contains representations that [ ] does
not engage in transportation of funds for third-party beneficiaries. FinCEN would not
deem [ ] a money transmitter by virtue of physically transporting currency for a U.S.
customer, to and from the customer’s U.S. financial institution, on the customer’s own
behalf. Thus, to the extent that [ ]’s local currency transportation consists of
transactions either originating, or terminating, with a U.S. financial institution, and that
are not conducted for third-party beneficiaries, FinCEN would not deem [ ] a money
transmitter by virtue of such transportation.

By letter dated February 23, 2004, you have represented that [ ] no longer
engages in trans-shipment through the U.S. as described above. Therefore, we have not
considered this activity in making the determination that [ ] is not a money transmitter under our rules. However, the definition of money transmitter at 31 CFR 103.11(uu)
applies to each “agent, agency, branch, or office within the United States of any person
doing business” as a money transmitter. As explained above, this definition is broad, and
applies to the physical transportation of currency. FinCEN would treat as a money
transmitter a U.S. business that engages in trans-shipment as described in your letters.
The relevant factor in this analysis is not whether or not the money that is trans-shipped
by the U.S. business leaves the international terminal, but rather the fact that a U.S.
business is engaged in the business of money transmission. Therefore, to the extent that
[ ] engages in trans-shipment transactions, FinCEN would deem [ ] a money
transmitter, subject to all applicable BSA requirements, including the requirement to
register with FinCEN

In order for FinCEN to make a determination whether [ ] is a currency dealer or
exchanger under 31 CFR 103.11(uu)(1), we requested a more complete description of the
extent of the currency exchange services that [ ] provides beyond mere physical
transportation of currency (including involvement in determining the place and date of
exchange, having a financial stake in the transaction based on the rate of exchange
obtained, and any other involvement in a currency exchange transaction). According to
the representations contained in your December 9, 2003 letter, when transporting money
for the purpose of currency exchange, [ ]’s only role is the physical delivery of currency
to the destination designated by its client, and the return of new currency or currency of a
different country, to the original sender. [ ] does not select the place or date of
exchange, and does not have any financial stake based on the rate of exchange obtained.
Based upon your representations, FinCEN would not deem [ ] a currency exchanger
because in physically transporting currency for exchange, [ ] does not participate in, or
have a stake, in a financial transaction, and therefore is not engaged in the business of
currency exchange within the meaning of our rules.

In arriving at our decision, FinCEN relied upon the accuracy and completeness of
the representations made in your letters. Nothing precludes FinCEN from seeking further
action should any of this information prove inaccurate or incomplete. Should you have
any questions about this letter, please telephone Christine Del Toro of my staff at (703)
905-3590.

1 [ ] also conducts international courier operations between foreign-located financial institutions. Information that you have submitted on behalf of [ ] indicates that [ ] has offices located in foreign countries. From your letters, it is not clear whether such international courier operations are performed by a foreign-located branch or office of [ ]. Accordingly, we have not considered it in making our determination. For your information, FinCEN’s definition of money transmitter applies only to an “agent, agency, branch, or office within the United States” of a money transmitter. See 31 CFR 102.11(uu). For reasons of jurisdiction, FinCEN does not generally treat a foreign-located branch of a U.S. money transmitter as an MSB.2 See FinCEN Letter Ruling dated June 11, 2002.3 When a BSA financial institution contracts with an armored car service to conduct transactions that trigger BSA requirements, the financial institution itself is required to ensure that such BSA requirements are met. See Ruling 88-5 (August 2, 1988) 31 CFR Part 103 Appendix A.